Greenfire Resources (NYSE:GFR)
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American Financial Group, Inc. (NYSE:AFG)(NASDAQ:AFG) (“AFG”)
and Great American Financial Resources, Inc. (NYSE:GFR) (“GAFRI”)
announced that they have entered into a definitive merger agreement by
which GAFRI would acquire the GAFRI shares which AFG does not currently
own at a price of $24.50 per share in cash, for a total purchase price
of approximately $225 million. AFG beneficially owns approximately 81%
of the outstanding shares of GAFRI. GAFRI will use excess capital plus
borrowings from AFG to fund the transaction.
The GAFRI board of directors unanimously approved the merger agreement
following the recommendation and approval of a special committee
comprised of directors of GAFRI who are independent of AFG and were
advised by independent legal and financial advisors.
The final terms of the merger (including an increase in the
consideration to be paid for the GAFRI shares) also reflect separate
negotiations with counsel for certain shareholders of GAFRI who filed
lawsuits in February challenging the original merger terms proposed by
AFG. A memorandum of understanding has been executed between counsel for
the parties in that action, which, subject to court approval, will
settle all litigation involving the transaction.
AFG believes the transaction will be accretive to earnings per share and
enhance its return on equity. Craig Lindner and Carl Lindner III, AFG’s
Co-Chief Executive Officers stated: “We are
pleased to have agreed to merger terms acceptable to both AFG and GAFRI.
The transaction will allow AFG to use excess capital to increase its
ownership of a specialty-focused business and simplify the AFG
organization. It will also result in immediate expense savings through
the elimination of a public company and allows for other synergies that
will provide efficiencies over time.”
The merger is expected to be completed in the third quarter of calendar
year 2007, subject to customary conditions. The exact timing is
dependent on the review and clearance of necessary filings with the
Securities and Exchange Commission. The transaction is subject to the
affirmative vote of the holders of a majority of the outstanding shares
of GAFRI. AFG has determined to vote or cause to be voted all of its and
its subsidiaries' GAFRI shares in favor of the merger.
In connection with the proposed merger, GAFRI will file a proxy
statement with the Securities and Exchange Commission, and upon SEC
clearance, will mail the proxy to shareholders. Shareholders of GAFRI
are urged to read the proxy statement regarding the proposed merger when
it becomes available, because it will contain important information.
Shareholders will be able to obtain a copy of the proxy statement as
well as other filings containing information about AFG and GAFRI, when
available, without charge, at the SEC's Internet site (http://www.sec.gov).
In addition, copies of the proxy statement can be obtained, when
available, without charge, by directing a request to GAFRI at the
address listed at the end of this news release.
GAFRI, its directors and executive officers and other persons may be
deemed to be participants in the solicitation of proxies in respect of
the proposed transaction. Information regarding GAFRI's directors and
executive officers is available in GAFRI's Form 10-K/A for the year
ended December 31, 2006, which was filed with the Securities and
Exchange Commission on April 30, 2007. Information regarding the
participants in the proxy solicitation and a description of their direct
and indirect interests, by security holdings or otherwise, will be
contained in the proxy statement, the Schedule 13E-3 transaction
statement and other relevant materials to be filed with the Securities
and Exchange Commission when they become available.
Through the operations of the Great American Insurance Group, AFG is
engaged primarily in property and casualty insurance, focusing on
specialized commercial products for businesses, and in the sale of
traditional fixed, indexed and variable annuities and a variety of
supplemental insurance products.
This press release contains certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. All statements in this press release not dealing with historical
results are forward-looking and are based on estimates, assumptions and
projections. Examples of such forward-looking statements include
statements relating to: AFG’s expectations
concerning market and other conditions, earnings and investment
activities as well as the impact of the transaction and expected expense
savings.
Actual results could differ materially from those expected by AFG
depending on certain factors including but not limited to: the terms of
the proposed transactions, changes in economic conditions including
interest rates, performance of securities markets, the availability of
capital, regulatory actions and changes in the legal environment
affecting AFG and other changes in market conditions that could affect
any party to the proposed transactions.